Reverse auctions are secure, web-based, “downward price” auctions during which pre/post-qualified suppliers lower their prices real-time for Government products. Vendors are allowed to bid as often as they wish during the auctioning period. There should be three or more vendors participating in a reverse auction. Reverse auctions are relatively new to the Federal Government. This procurement, bidding, and e-Gov tool appears best suited to buying a large volume of simple, well-defined, or standardized commodities. However, reverse auctions are consistent and compatible in making “best value” awards. During an auction, bidders are aware of when the prices change, however, they do not know the names of their competitors. The dynamic competition inherent in reverse auctions has resulted in pricing that is closer to that of the true market. On average, reverse auctions result in a 10% to 24% price reduction over that of traditional pricing methods.

It is important to remember that a reverse auction is only a pricing tool . It does not preclude any other aspect of the acquisition process. It is simply a technique to capture the best pricing available at auction time.

The Office of Logistics and Acquisition Operations (OLAO) has the expertise in assisting or performing all aspects of the reverse auction process for your organization. The expertise is available to your organization and can be used in full or to supplement your existing staff and resources. For further information about the reverse auction process, please contact William Brown, Chief, Acquisition Planning and Specifications Branch, Division of Acquisition Programs, (301) 435-3916.